- What The number of vacant retail units across the UK remains relatively flat, as recovery in some areas is balanced by stagnation elsewhere
- Why Shopping centres and retail parks have reduced vacancies while high streets have continued to struggle
- What next Persistent vacancies point to areas most in need of investment and regeneration
Shopping centres and retail parks are gradually improving occupation levels following a vacancy high at the start of 2021, according to the Quarterly GB Vacancy Monitor released by Local Data Company, React News’ sister company.
The research looks at overall vacancy rates across the country, as well as by asset type and includes persistent vacancies.
Overall vacancies across all types of retail increased slightly year on year by 0.2% to 14%. There has been a gradual increase in vacancies compared to the pre-Covid period, when they made up 12.1% of total stock in the final quarter of 2019.
In terms of persistent vacancies, where a retail unit has remained vacant for two or more years, shopping centres ended 2023 at the highest level of all asset types with 9.9% of units left empty, followed by 7% of UK high streets and 4.4% of retail parks.
Tracking by location type over the past five years, retail parks and shopping centres have shown an overall decline in vacancy rates, while high streets have experienced an increase.
From a vacancy high of 19.4% in Q2 2021, shopping centres dropped to 17.7% by the final quarter of last year. The sale of some of the larger shopping centres resulting in new asset managers and strategies, that has led to strong leasing activity, has been a big contributor to the shift in these figures. A “rightsizing” of shopping centres taking some space out of circulation, and a shift in the mix of uses has also removed some vacancies.
From its own high of 11.5% in the second quarter of 2021, retail parks had the biggest drop in vacancies, to 7.6%. One of the consistent performers during the lockdown periods, footfall and spend across this asset type has continued as shoppers benefit from free parking, and retailers pivot their strategies to use the units for online fulfilment, click-and-collect or returns.
In the same period, vacancy levels across high street retail have persisted, moving from 14.5% to 14.0%. As work has continued to reposition high streets across the country, this suggests that improvement in some areas has been balanced by out by consistent struggles in others.
Lucy Stainton, commercial director, LDC said: “As always, while the latest top-line vacancy data indicates seemingly nominal change, holding steady at 14% quarter on quarter, the reality becomes more nuanced upon closer examination, which is critical to analyse and understand.
“This quarter reveals continued notable improvements in both retail parks and shopping centres, with retail parks, in particular, achieving their highest occupancy levels since 2019. We anticipate this positive trend will persist, given the continued focus of a diverse range of operators across various sub-sectors.
“Grocery-led anchors lead the way, but we also observe an uptick in other categories such as health clubs, health and beauty, and food to go. This diversification enhances the appeal of these parks to consumers, aligning with their broader shopping missions.”
Regionally, the North East ended 2023 with the highest vacancy rate at 17.9%, though a slight improvement on Q4 2022. Greater London has the lowest level of vacancies at 10.6%, a -0.4% drop on the same period.
Since the pandemic, the greatest improver has been the North West, which had a 0.4% drop in vacancies to 15.6%. This can be attributed to investment across its busiest retail streets in Manchester city centre and the Trafford Centre, which have seen strong opening activity.
Stainton continued: “While vacancy rates demonstrate continued stability post-pandemic and exhibit promising signs, it is crucial to remain attentive to persistent vacancy levels across GB. These levels serve as robust indicators of areas requiring structural change and substantial stakeholder intervention. Persistent or long-term vacant stock has risen across all location types and asset classes, highlighting the need for targeted redevelopment to address the lack of demand for traditional uses of these spaces.”
The LDC vacancy monitor analyses the performance of the Top 650 town centres across the UK. Vacancy rates look at the number of vacant units as a percentage of total units, using field-researched data. Persistent vacancies measure all high streets, not just the top 650.